Fel Iron is a metal that can be mined. Fel Iron ore can be smelted into Fel Iron bars. Two ore are required in order to smelt one bar. It is found in rocky regions, as well as those heavily populated by demons. Apart from being found in Outland, it can also be mined on the Isle of Quel'Danas, along with all the other Outland ores.
Since it can be found on the Isle of Quel'Danas, fel iron may be a result of the concentration of fel energy.